V A L U E A D D E D P R O D U C T I V U r V A N A L Y S I S A j ) j ) l i ( '( l (x) l u r k i s l i Е ' г і л і і / д 'г C o r i x o r a t . i o i i
9 8 8
Λ 9:iiosi,s
SubniitlxM l (;o l.lu' l)('[)ar(.iii<'iil. o f E c o n o m i c s a n d t h e I n s t i l , u t o oí E c o n o m i c s a n d S o c i a l S c i c n c ( 's o f l.blk('iil U i i i v ( 4 s i l . y I n La.idia.1 E n l l i i l l n i c i i l . o f l.bc R < ‘( | ii ir cm ci i (, s foi' f l u ' D ( ' g r ( 4 ' o f K/1 A S T E R 01'^ A I D ' S IN I R J O N O M I C S V c vr></a: A ' a n /atcr^iKC^'c.:. / l)v B ( ' ] u ’oo'/ S A M I N .) a x i l l a r y 1 9 9 1
ис
ц з в л : о гI (•('гі.ііу Uial I liav(î іч'ачі Ibis IJk'sís and iii my opinion il. is Fully ad(4|uai(î, ill scoiKí and in (|ua.lilv, as a. I.Ik'sÍs loi· Ι,Ικ' (1(‘дг<ч' of MasUn* of /\i*ts in b^conomics.
< ('i l/dy Flial I Ііалч' гсчкі l ilis l.lu'sis a.nd in my opinion il is Inlly a.d('(|naic, n scope' a.nd in (pia.lil.y, as a. I.lu'sis for l.lu' d(M?T('(' of lVIa.sl.cr of Ai*ts in '4.4)noinics.
<ч'гііІу llia.1- 1 lia.v(' ı·('a.el Ibis l.lu'sis a.nd in my opinion il, is Fully a.d('(|iialc, u scope and in (ціаГіІ.у, as a. llu'sis For І.Іи' (Ь'ді'еч' ol iVIa.sLen· ol y\i*ls in '4()iiomi(:s.
Appi’ovi'd by I.İK' Instil,nl('oF Socia.l and Імч)ііотіс Science's
A B S T R A C Γ
VAI.Ul·: ΛΙ)Ι)10Ι) I M U ) l ) U r n V T r V ANALYSIS
Λ|)|)Γκ'(Ι Γο S'lirkisli Ι'γ ι·|/ιΓγ/ (ί· (Soi pora.l ion
l!)SS 10!) I
|{('liro()'/ SA MIN MA ill Kcoiioinirs
Su|)('rvisoi·: Assoc. Liof. I ' mil Ι'!ιol 'aiimiry !!)!) !
Ill I his sl.udy a. valiK' addc'd |>rndiicl,i\ ii y analysis^is rniiduci.rd at a. |)ul)li(‘ly owned
('ii(.<;i-|)risc in d'lirkcy. ΊΊκ^ diosiai nu'l.liod is known as W'aiiiai iiud.liod. \ ] y a.da.|)(.ing
t his method, w(' first find out tiu' valiK' a(ld(Hİ for tlu' company. Obtained value added is aj)j)lied to calenlati^ company's pi'ribrmanc.ii and productivity ratios. During tluî period
1 -1991, th(^ c.om|)any’s profitahility and prodnctivil.y ha.v(' drastically d(x:liıi(Kİ. ΊΊιο
main ri'ason is tlıcî snl)sta.ntia.l d('cr('as(' in th(' lahor cost competitiv('ii('ss ratio IxMauise of both inc.r(\Mse in tin.' lahor cost and d('cr('as(' in th(' valiK' addl'd. 'The company snilers li'om high a.monnt of inti'ri'st paynn'iits to commercial hanks. It has ma.di' vi'ry hig aiiionnt of iK't lossi's in 1990 and 19!)l chii'ily due to tlii'se inti'ri'st I'xpensiis.
K o y W o rd s: Productivity, VaJiu' Adch'd, SiiLliaction Mi'tliod, Addilion Mi'tliod, La.Lor ('Osl ( !om|)('l,itivrn('ss, Pro(il.a.l)ility.
OZEl·^
K/VPMA l)l·:c:l·:ı^ v i s K İ M L İ ı . i i n a n a lİzİ Tıirkiyc' (!ül)i(' Sinıa.yii A. ,S. (TIKÎSA.^)
li)<SS l!)!)l
Hrhıooz SAMIN
Yüks('k 1/ısa.ııs 'r<v>i, İki isal lU’ilıiıııii T(V; YiHK'ticisi: Dor.Dr.Uıııil, lOrol
()r a.k li)() l
Hu raliijinadn 'riirkiy('’d('ki l)ir kanın kııπılu^^^ııı(1ıı kalına d('jL';('r verimliliği a.nalizi
.sıınıılmakl.adn·. Uygulanan ıiK'l.od V\'aiııai ımd-odudıır. Hn ıncl.nd ile, öncelikle
sirkelin kalma. d(^geri hesa|)lamnakla(lır. Kl(l·' (HİiKaı deg('r il·' knrnlıii^nıı iH'idormaııs
gösli'rgeleri li('sa.j)la.nmakla.dır. 19(S(S li)9l yıllan için l)iı gösl('rg('l('r lıa./arla.narak,
kıiiiıln.'^ım karlılığının V(' Vi'i-iınliliginin l)iı dcnK'iml·' lıiiyiik (dciicl·' azaldığı gözkmınif^lir. Hnnnıı da en büyük lu'deni if^iü maliyell('rind('ki arlı.^ v(' kalma d('g('rdeki aza.lı.‘^ yüzünden isçi ma,liy(dü r(dûa.b(d.ciligi oranındaki d)m'mli düsü.slür. Knrnlns licari ba.nkalara. yüksek miklarda. I'aiz ()d('m('l·'rİIıd('n dolayı sıknıl.ıdadır. 'I'IK JSAS bu laiz od(·nı('l·'ri yüzünd(nı
İ9!)i) \ ' ( ) 1991 yilla.rnida.cok büyük ik'I zara.rlara. ngrannslır.
Aııah tci r K e l i m e l e r : V('rimlilik, Ka.lına. I)('g('r, (Jıka.rnıa. iVhilodıı, 'Toplama Mi'l.odn, ls<;i Maliy('li l{(d\a.l)('l,riliği, Kâri
Acknowledgements
1 would like lo tliank Assoc. Prof. Di·. Umit Idrol for Ids supervision, guidance, and suggeslions Uiroughoul, flui dcivelopnicut of I,his thesis. I would also like to thank Assoc. Prof. i)r. (jan ,Sunga Mugan and Assoc. Prof. Dr. Osman Za.iin for their va.lua.bl<; comments a.ud suggestions which led to improvements of this thesis. 1 am grateful to Mr. Ayhau Artar from National Productivit}' Center who ])rovided me with the necessary background and data in.
Special thaidvs go t(; Ali Amiii|)our for his help in typing, and Ismail Sağlara, in constructing the tables. And finally I would like to thank my fairdly for their (nicouragements.
Contents
1 Introduction
2 Waiiicii Metliod
2.1 VVlial is valiK' a.(l<l('<l?...
j
2.1.1 Iin|)()i‘UMic(' of vi\\ur a.(l(l('(l a.iia,lysis
2.2 (.IaJciila.lic;ii ol valiK' a x ld t'd ...
2.2.1 'riui sul)l rac.l iuii iiu'I.IkhI 8
2.2.2 'I’Ik' a,(l(lilion m e t h o d ... ... 9
Value' add('(l ra.iios 10
2.2.1 Pi'oduclivil.y ra.l.ios 11
2.2.2 l^abor cosl. roin|)('l,iliV('ii('ss ralios 16
2.2.2 Pro(ilaJ)ilil-y ra.f/ios 17
Application of T he M ethod
3.1 An ovcrvK'vv o f ' I ’urkisli r(Ttili'/,('i' iixlii.sl i v
3.1.1 'I'niki.sli l·'(τl,ili/,<'|· ( 'oi|)oi;il iuii (T lU iS A ^ )
•3.2 A|)|)lyiiit>; (.lie VViiiii.ii iiiHIkmI
3.2.1 Dal.a. collc'c l ion and l,ra.iislui'ma.l,iun
•3.2.2 Va.IiK' addc'd calcnla.l.ion
3.2.3 I'diidiiif», lli(' laliu.s .
•3..3 l''/iii|)irica,l r('.snll.s
21
21 22 2.3 23 26 29 30 4 Conclusion 36A Value Added and Perfonnance Ratios 39
B Fertilizer Industry in Turkey 52
C Financial S tatem ents of Turkish Fertilizer C orporation:
1 9 8 8 -1 9 9 1 . 57
C hapter 1
Introduction
rrodiicLiviLy lias an iinporl a.iil i‘ol(' in I Ik' ('conoinic (l('V('lo|)m(inl
and \v('Har(M)r coniilric's. Many connlrit's i('f>;a.r(ll(\ss of l.li('ii· ('conoinic syslcin liav(' dis(’()V('i’(ul l\\c impact of prodiidivil.y iin r(\\s(' on l.lu'ir (u:onomic gi’owt.li raU^ In t.lu' D ic lio iia ry o f hd-onom ics and. Hiisi.ncs.^^ iirodiiciivity is (I(dined as:
Pro(Iu(:(,ivi<;y. aiiioiinl. of product. l.uriK'd out. I)}’ a vvorkiU' (or unit, of allot,li('r i’a.d.or of producl.ioii) p('i· miilor l iiiK'd
and in l\\c M a iia y c m rn l: ( 'oticcpls aiul. I'yJIri'luw Piuclicr^ it, is dtdiiu'd as:
raiio l)(d.\v('('ii r(\s(')iirc.('s input, t.o product.ioii and t.lu^ valm^ of goods produced^
II()vv(iV(M·, in a, wid('r |H'rs|)('d,i\'(\ prodnel.ivilv ca.!! \)o dcdiiuHr as '.S('(' N(Miiiii('rs ( li)7()). p. iir>()
IK'i forrnana' of an ('iiUn’prisi^ as a vvliol(\ 'Hial. nuNins Ix'sidc^s product,ion proc('ss, vv(^ should considc'r inai’k(d,iiig and oIIkm* pi‘oc(\ss('s also. In a company, it slioidd he known how (,o prodnci' and s('ll a pioduci. d'h(M‘cfoi*c, pi’oduclivily m(^a,snr(un('nl and analysis arc' \'('iy import,a.nl. loi’ an (Mit,('r|)ris(i.
In ('conomic t,('rms, |)i-odncl i\ it.y can inci('as(' in l.wo wa.ys. Oiug assuming a. giv('ii t,('chnology, t.lu' marginal prodin t i vit.i(‘s of fa.clors of production ca.n go up and t.his in t.nrn wonid cans(' an incrc'asc' in the pi'odnctivit.y of a. firm in a pc'iiod. thia,ng(' in marginal pi'odnctivitic^s will chang('. th('. sha.p(i of production In net ion such that, t,h('i(' will h(^ morci on I. put at, a fixcxl amount, of input,. T Ik' marginal pi-odnct.ivil,i(\s go up a.s a i*(\sult of S('\'('i a.l i(Xisons such as ('(hci('iil, ns(' of inputs, improv(‘meiit.s in ma.iia.g('m(Uit- ('inployee redations, pa.ying inc(U)i,iv('s l,o ('niploy('(', ('t,c. S('cond, pioductivity
j
can incr('a.s(' diK' l,o a. l,('chnolog;ica.l cha.ng('. d'his would ca.ns(' a. more' ('llicii'iit ns(' of factois of |)r()duction a,nd n|)wa.rd shift, of production function and I'i'sult, in a liigluM· pi*odnctivil,y. In l)ol,h ease's tol,al la,cl.(;r productivity ( pioductivity of a,II fa-ctors of production), h('iic(' l,h(' value added, will mcrcxisi our ('inpirica.1 sl.udy tlu'ie' is no t.i'chnologicaJ change' during I,he' period, se) theu'e^ is not a shift in t he' pie)elue l,ie)n fune‘tie)ii.
In Turke'y, l,he^ |)roeluctivil,y a.na.Iysis ha.s l)eMe)me^ e)iie' e)f l\\c most impe)rtant issuers, (airreuitly the're'. are ele'hat,e's whe'ihe'r the' puhliedy held ('nl,('i prise'.s are' pi*e)elue t,ive' a.nel pi'e)(il.a.l)le' e>r ne)l,. Se)ni(' |)e'e>pl('. Ix'lie^ve' thc'y <ne' ne)t anel she)nlel he' privatize'el. ()l,he'rs Ix'lie've' l,ha.t |)nhrK*.ly e)wneel
'dl(ir(?, vv(i assumes Uie^re^ is no siiikk'n shocks in tlu' (l('inan(l for I.Ik' prodncl,. Ollxirwise^, liiglx'r elennaiul will alse) e‘a,ns(' l.lx^ vaJiK' addi'd l.o inn('as(' providi'd (,Ik! coinpa.ny eloe^s
iiol. nl.ili/xi too % (:a.|)a.cil,y. In l,his cas(', l)(‘ca.ns(' of high d(ana.iid, IIk' coinpany will start producing a.ixl sn|)plying inorc' hy higlxM· capacil.y nl.ili/aiion and as a. r('snl(. the' c.oinpany 'vill lniv(i a. higlii'i' a.monnl, of va.IiK' a.ddc'd.
(•(>m|)ani(is can Ix'. тападчч! as |)r()(lucl.i\'('ly as |)riva.l.(' com|)a.ni(\s.
Tlunxi ai(i slmlii^s, on prodnctivily a.nal^’sis, wliicli lind oiiL pcrfoianancc inclicalors in SOUK' 'Tiirkisli indiisl-ri('s. T Ik'S(' sliidic's ai(' ma.inly doiKi and |)id)lisli(ul l)y Na.iiona.l l^’ixliicl ivi(y (Vnl.('r . Aylian /\rl.ar (li)i)l) has doiui a prodiicl.ivil.y c.omparison а.топд sonu' xolniil(Ч'г (4)inpa,ni(\s in limiiiurc indiisli'y. Л1р(П· /\ydin (1!)!)‘^) lias |)iodiici'il |)rodiic( i\il,y indica.I.ors in Uic non-imd-aHic miiK'ra.Is indnsiry lor l.lu^ vaxus ID.Sf) I!)(S1). ddi(' sa.m(' author in 1993 ha.s found tlu'. productivity indii a.l(as of ch('mica.ls a.nd pid.rolcum products industry foi- tlu' ya'a.is l!)(ST l!)90. l·^lNiha.n 'Га.пка.||уа (1992) has calcida,t('(l 1\\сж indica.tois (or th(' food a,nd toha.cco industi'y lor the v('ai\s 1980 1989. Uxxx'iif.ly, Ziiha.l /\kal (1993) has coinpa.i'i'd productivity, profitability a.nd cost compcd itiv('ik\ss among publicly owiu'd manufacturing
ji (mt(U’|)ris('s.
In this study, Tarki sh I ' r r l l l i z c r ( 'orporal i on is chos(‘ii to u.pply the' value addcxl productivity analysis, d'ni kish Ix'i tili/xM· ( 'oi pora.tion (ddl( ISAij) is a publicly h(9d (mt(U‘i)ris('. VVhih' trying \u choos(' tlui company, special a,t!,('ntion is paid to aviod choosing a. monopolisi, (ii in which c’an incicxise its valuer add('d l)y s(^tting th(^ pricce 3'lK!Sy\i^ op(U‘at(\s in a comped,itivc^ market sti*uctur(i. 'Г1к^ VVainai nu'thod is c(uiducl.('d. Kiyoshi VVa.inai (1987), from
Nal.lonal P r i n h u ' l i v i l y (■r ul er \u Singa.poie', in P r i n r i p i r s and A p p U r a l i o n o f
Valve Added Proilniid/ivilij Analysis^ shows a.nd (wpla.ins the' (led,a,iIs of this
imddiod. 'This med.liod has heew in pra.e tic(' foi· a. long time' in Ja.|)a.n and |■('C('ntly in Singa.pori'.
iiK'tliod. Siihl.raclioii and nddilion nud.liods (oi- \nlu(^ a.ddc'd calcnlalion ar(' sliovvn. 'riu'ii calcnlaXions a.nd inl('i|)i('(alions of IIk' i-aJ/ios of Ihe prodnclivily, prolilabilil}' and labor cosí coinp('lili\’('ii('ss ai(' d('all willi.
Tliird clia-|)l('i· a.ddi'('ss('s llu' applica.l.ion of IIk‘ VVaina.i nu'lliod. As poinU'-d onl, Tnrkisli InM lilizíM· ( \)i‘poralion is s('l('cl('d lo ap|)ly Ibis nu'lliod. /\ddilion nu'lliod is ns('d lo ca.lcnla.b' va.liu* a.dd('(l loi* IIk' coni|)a.iiy. All ix'snlls abonl IIkí va.IiK' addc'd and lalios ai(' pr(\s('iil('d in iJiis dia|)lcr.
ddic la.sl chaplí'i· is d('vol('d lo conclusión. 1I(M(' a snininary of ihc vvork lc)g('lli(M· willi s(nn(' concinding r('inai‘ks a.i(' giv('ii.
C hapter 2
W ainai M ethod
This cliapit'r (hials vvilJi l,lu' ih'la.ils of VVaiiia.i iiK'lliod. hi llu' iiisl sc'.clion N’aliKi adch'.d a,iid ils signi(ica,iic(' ai(' d('a.li. will). In IIk' si'.rond stxd.ion a.ddiiioii and suhlia.dion iiK'lliods loi· caJcnla.Iing va.liu' addc'd arc^ prchsonted. ddu' product/nUy ratios, labor cost (‘oinp< lit/r/ ness ratios, and prolitability ratios i\.\\{\ l.lu'ir ¡n(.('r|)r('l,a.l,ion a.i(' provided in I Ik' Iasi- s('c(.ion.
2.1
What is value added?
According (-0 Kiyoshi VVainai valiK' a.dd('(l can h(‘ (hdiiK'd as:
ValiKi a.(l(l(Ml na'aiis (.Ih^ \V(h‘iltli cri'aii'd hy a. l)iisiii(\ss (ail.er()ri.s(\ It is
(liilori'iit IVoin sa,l('s ı·('V('Пıı(' l)('(*a.iis(' it (lo(\s iiol, include tlu' w(\a.ltli cr('a.t(Ml
by tli('sii|)|)li('rs to tli(^ ('ut('r|)ris<'. It is (‘(|iia.l l.o tlu' iiicoiiK' iVom sa,l(^s oftln^
product or s(M-vi(‘('s (out|)iit), h'ss tlu' ('xp('iidil iir(' on |)urchas('d matc'rials
Siiicci valium a,(l(l('(l is a. пк'а.чтч' of llu' wc'altli Д('1км'а,1(ч1 by the ('inploycxis, (^m|)l()y(^-s, a.iid iiivi'sl-oi’s, il miisl. Ix' iis('d l,o pay Uios(' vvlio have <4)iil.ril)iil(4l 1.0 ils (TC'a.lion. Owe pai l, ol l lu' \v(‘all.li is disi l ibulod a.s wa.g(is, .sa.laiii's, a.iid p('iisioiis l.o IIk' ('iiiplo\4'(‘s, iiil.('i('sl. on loans l.o I.Ik' (T(‘dil.oi*s,
l.a.\('s U) l,li(' (.n)V('rnm('iil, a.nd dividcnids l.o I Ik' sliaic'lioldi'rs. 'Г1к' о1.1кп' pari, is i4'la.iii(Hl in LIk' rompa.ny as i('l,aim'd ('ai iiings l.o Ix' iis('d as vo^evves or For inv('simonl,s a.nd d('pi('cia.l,ion of assc'l.s. Va.lix' a.dd('d m('a.siir('s llx'. dilFc^rínicc lx^l.vv(i(ni vvlia.l, Fix' ciisloirn'i· pays foi’ I.Ik' oiil pnl, and wlia.l, l.lu' ma.nida.cU.ircr
Ol' siippliin' pa.ys foi' Fix' inpiiFs.
2Л .1
Im portance of value added analysis
than I.Ik' gross oul.pul, of IIk' hiisiiK'ss ('ii(.('r|)ris(\
d'ix' |)roducFion a.nd Flx^ dis! ribuFion ol \v('all li ai (' Fix' Fvvo aspcx’Fs vvhicli ai'(' brougliF Fogc'.Flxx’ by va.lix' addc'd. An a.nalysis of valix^ a.ddixl sliovvs liovv a. coinpa.ny cri'a.Fi^s vv('a.lFli Flirougli iFs piodiicFion pi'orx'ss a.nd bow iF disIribuFcs Flxî vv('a.lFli ainong Flx)S(^ vvho ai'(' Fix' ('l'i'aFors of Fliis vvoalFli. My analysing Fix'. producFion of va.lix' a,dd(xl, \v(' ran a.ss(\ss Fbo (dficicMicy and ('iFi'cFivi'ix^ss of a.n ('nF('i*piis('. d'iiis indira.Fi's liovv piodiirFiviFy eau !)(' incrcasi'xl Fo inakci liiglx'i' prolil.s. d1iis, in Fiiin, (xiablcîs dir('x:Fors of a biisiix^ss ('iiF(îr|)ris(i Fo d('(:id(' on issix's lik(' cosF i('dud.ion a.nd capiFal iiili'iisil.y. On Flx' oFix'i* lia.nd, a.n a.nalysis of l.lx' disFribiiFion of valixî add('d shows Flx^ r('laFion Ix'l.wx'i'ii ('inploy('('\s r('vva.rds a.nd Flx' siicr(\ss of l lx' ('iiF(X'pris('. Tliis Ix'lps Fo ('ncoiira.gi' Fix' ('inploy('('s of an ('i)F('rprisc Fo
|)arl,iri|)al(^ in impioviiig tli(' |)(м Го11па.пг(' of I.Ik' ('iiU'rprisc'. 'ПимчИогс^ the iinporiaiKX' of vaJiu' а,(1(1(ч| a.iialysis li('s in vaJiK' addi'd Ix'ing a ba.sis for prodiictivil.y m('.a,siir(nn(nii.'^
2.2
Calculation of value added
\ddii(' a.ddi'd, a.s nu'iil ioiK'd a.bovay is I.Ik' di(l<'r('iir(' ЬНлусчш iiicoriK^ .o,(ni(M'aied (Vom sah's a,nd rosi of pmriiasc's. d‘li('i(d()r(' it can h e calculated as:
IncoiiK' Ircmi tlx' sa.lc's of рг(л1пс1. oi· scn vict' fontpiit)
l('SS
Purchased niatc'rials and s('i vic(\s Irom outsichi (input) (4|iials to
VaJiK' а.(1(1(ч1 (('itln'r distiibiitc'd oi· li'ta.iiii'd)
Г1и ‘ Г(^ i i v c t w o m ( ' l , l i ( x l s o f c a l c u l a . t i i i L » ; v a l i K ' a , d d ( ' d :
Subtraction iiKdJiod in whicli:
Va.IiK^ Л(М(ч1 Total sah's Mon,i>^lit in ma.tiuia.ls a.nd s('rvic(\s
• A d d i t i o n n u d . l i o d i n w h i c h :
Va.liK' Addcid -·- La.boi· cosi, | Inl,('i(\st 1 da.x | l)(^pi4H:iation I P ro lit
2 .2 * *1
The subtractioii rnethod
'V\\c siibiraclioii nu^lliod s('('ins v('iy siiii|)l(' l.lK'oií'licall^', bul, iii practico diííinil(,i(ís iiwi.y aris('. Iii tliis iiK'tliod, vnliK' a.dd('d is ('(|iia.l to tli(' subtraction of boii^ht-iii iiiaXí'riaJs and .s('rvic('s (rom tlu' sab's (aii iKna'i·.
S al e s T u r n o v e r SaJc's tm novi'i· is IIk' incoiiK'of IIk' sa.K's urout|)iit which is g(ni('ra,t(xl by tlu' pi-odiiction piocc'ss of a, coinpaiiy. d1i(M’(dbr(i all other iiicoMK's siirh as i-('C('i\dng royalti('s in patcnits, dividends from associa.t(ul com|)ani(\s, inconu' from inVi'stnu'iits, rcnits from lease of buildings, snbsidii's, and otlu'r misc('lla.!i('ons il,(’ins should \)C (.'xcluded from sah's l.urnov('i·.
B o u g li t- in Mciterials VV(^ hav(' to d('t('iinin(' ('xa.ctly which purchased matcu'ia.Is must Ix' d(Hluct('d Irom sah's. It is obvious tliai tlu^ cost of raw mat('rials a.nd com|)on('nts should b(' subla a.ctc'd, since' they are outputs of oth(.'r compaiiie^s and tlu'ii' value' aeldeul avc calculated at tliosci companiexs. lle'i’e', ot coui’se', the' inve'iite)iy e‘lia,nge's should be a.eljuste'el for tlu'.se^ ite'ins.·^ Me)ie'e)ve'r e)the'i· iteniis siieh a.s mateu'ials iise'el lor spa.e:e' he'a.ting and lighting, eonsiimable' ste)ie's a.nel h)e)se' te)ols usexl in an e'nginex'i'ing fae'-I.e^ry, anel ee)st of mate'riaJs whie:h a,re^ usexl te) re'pa.iring a.nd maintaining slioulel be' ele'elue*l.e'el.
B o u g li i- in S e r v i c e s I le'ie' we' she)uhl siibtra.e t the' ite’ins like' ti a.nspe)i*ta.tion e.osts, a.elve'rl.ising e’e)sts. a.nel le'gab a.iielit a.nel e)the'i· lee's. If a e'.e)mpa.ny
■^VVei should a.el(l up Ix'giiiniiig iiiv('ii(.i>ry and puiT.lias(\s of raw inaUu-ials auel ('<)in|)oii(ail,s during a y('a.r, and I Ikmi cudiiig iiivi'iil.ory should Im' suhl.iacU'd i'roin Uk' • i'sidl. OÍ’ l,h(' a.dilil.ioii. 'This would Ix' l.lx' raw mal.<'ria.ls and coiiipoiK'iil.s cosl, during l.he^
Vi'ar.
lias its own liaiis|)orl,al ion íl('(^loi· a.<lv(M‘lising (l('|)arlni('nl, or lawyers, llien ili(is(^ ii('ins should not Ix' (h'dnrUxl, siii(.(' l.lu^ii· (íx|)(mis(\s coiíkí
onl of \,\\c vii\uc a.(l(l('(l of Uk^ roinpa.ny. OI.Ik'i· i(.('iiis which a.r(^ nsnally (IcducU'd ar(i postage' costs, bank charge's, le'iil, e)f bnilelings, insurance |)rennnms, e'te*.
In genie'i-a.l we' e*an say il the' e‘e)sts are' senne'e)ne' rise' s e)iitpnt, the\y are nc)t part of the^ ce)inpaiiy's value' a.elele'el. d'he'ie' are' ele'bate's among pe^ople whe'the',r some^ itenns are' in tlie^ va.Ine' aehlesl or not. I le)vve've'r, theise^ have a mine)!' (die.ct e)ii the^ value' a.elel('el iigui-e'; it is ve'iy impoi'tant to know that in any eompaiison be'tvve'e'ii e)!\iya.niza,tie)ns e)r within an e)rga.niza.tion ove'!* timeg the' sa,me' ine'the)el e>( e-aJciilatie)!) she)ulel be' e-exi(lne.te'd. ‘
2.2.2
The addition method
Ae/e-oreling te) (h'Iinitie)ii e)i vaine' a.elele'el, it sIk)WS the' weuilth that is e-olle'ctively eae'ate'el l)y the)se' whe) we)i k in a. company a.nd thosei who pre)vide the' e*a.|)ital. Se), va,lue' a.elele'el is elistribiite'el te) tlie'se' pe'e)ph'. An im|)ortant pe)ri,ie)ii of values a.ehleîd goe's te) l.lie' e'inple)ye'e's in the' re)i iii e)l wa.ge's, sa.la.rie^s, bonuse'.s, e:onti-ibutions to pe'iisions, a.nel ail e)l.hen· leai ins e)F e'mple)ymeuit costs. Ane)ther portion is elistribiite'el te) those' whe) pre)viele' the' e apitaJ, in the'. form of ilivideuiels e)i* inte're'sts. Hiit be'lore' elistribiiting eliviele'iids, a. part oF tlic vaine' a.eleleul goe's te) the^ ge)ve'rnme'iit as ta..\ e)ii pre)hts; se)ine' pa.rt is red,aiii(xl in theî enite'r|)rise'. a.s re'taine'el e'a.rnings te) be* nse'd For inve'sl.me'iit or otheu’ riiteu‘|)riseds elex:isie)ii making pre)e‘e'ss in orele'r te) ge'iie'ia.te' me)rei vaines addexl;
and Huí final |К)гГк)п is s(d, asid(^ as a diaig(' for l.lu' ()\vn('rslii|) and uso of the assets in t(M‘ins of dopríH’iation altlion^li it is not a. flow of oa.sli out of tlic business. 'Г1кич^()Г(' vv(' ca.n write'. Iİkî compoiK'iits of va.liu' a.dde'd a.s follows:
• VVagiis and saJaric's a.nel otİK'r ( ' i n p l o y u K ' n t c o s t s ,
• dividc'iids and inte're'st on loans.
• (kipreiciation a.nd ix'ta.ined ('arnings.
My adding tli('S(' ite'ins up, w’c can obtain the' \'alii(' a.dde'd for a. busincîss ('i)l('rpris(\ TİK' a.ddition nu'tliod in calculation of tli(' value addexl is sonK'tiiiK's ('a.si('i· and |)i('(('ii('d lo IIk' snbtiartion iiK'i-liod. İ4)i· both nu'l hods, tli(' ol)ta,ined value' adele'd is always e'e|iial.·’
2.3 Value added ratios
Valuer adek'd ratie)s te)ge'tlu'r will) e)tlie'r re'la.te'el ratie>s а.!Ч' tlie^ basis e)f X’aliie' а.еккм1 pi-e)eliictivity analysis. 1Ъе' me'a.sure'ine'iit e)f tli(\se' i*atie)s a.lk)vv pre)due‘tivity e:ompa,rise)ns te> l)e' a.ce:e)mplislieel bed.vve'en similar euiteu’priscs ene'r time'. In this seu;tie)i), vv(i will she)vv a.nel ek'hiu' the'se' ra,tie>s. Hut bede)reî de'iining ratie)S it is better te) ek'iine' the' te'i ins vvhieJi will be' use^el in the', ratio lonnulae^ as fe>lk)\vs:
S a l e s This itemi le'fers te> sale's vvlıieT ee)me' e)iit e)f the' imrmaJ e)pe'ratie)ii e)f the', euite'i pi ise'.
N um ber of Euiployees This il('in rc'li'rs I,о all forms of ('inploycxis in the
(Mit(M|)risc, including dii’i'cl.ors, |)a.il.ii('is, and pari I'wuc woi’ki'rs. ll
vvoidd l)('. I)(d,l.('r lo la.k(' IIk' a.v’('i-a.g(' for llu' p('iiod.
L ab or Cost d1iis iUnn rclc'rs lo llu' wage's a.iK.l pi'iision conli'ibulion paid
by llui ('inploy('i‘s. 'Г||(' ov('r linu' payiiK'nls should nol \)c. consid(M4id due lo I hc (a,cl llia.l llu'se' payiiK'iils ai(' nol inclndc'd in lli(i value a.ddcM.l, siiK(' t-li(\y a.i(i conside're'd as a. paynu'iil for su h con lracl work a.nd 11к'Г('1ог(' nol- a. pa.rl o( va.IiK' add('d.
Tangible Fixed Assets d'liis ile'in i4'h'is lo pliysica.l a.ss('ls (^xpi'clexl lo
liav(i a life lime' of oik' yc'ar or more'.
Operciting Ccipital This ile'iii re'lcrs (,o la.ngihle' (ixe'd a.sseds plus cui*renl ass(d,s.
O perating Profit This ile'in le'lers le> Ihe' pie)lil fre)in Ihe' e)p(U'aling
a.clivilie's of Ihe^ e'iile'r|)i-is(', lhal is e'xe luding Ihe' ('xlra,e)rdinary inconui e)i‘ loss.
Ne)w, Ihe dedinilie)!) e)f ihe' ralie)s wilh ihe'ii' inle'i pre'la.lie)iis are' elisscussed in Ihe' following s(H:lie)iis.
2,3.1
P r оduct ivity ratios
Valu(i added per employee is Ihe' (irsl la.lie) whie:h is useMi in valiui
V(due. A d d ed p er ¡Cniployee \'nhi( _А(Ы((1 N t i . n i h t r u f l U n p l o f / C i S S ( d e s p e r l^inploycu' x V a h u A d d ed lo S(de,^ S a l e у N u. ni hr r u f h'y inpl(}!/( ( s Vninr_ _ Add!A S a l ( s
;vii(l ,sal(\s \ ) c v ('mplovvM' ral.io ran 1и' (l(4om|)os('(| (‘пгМим· as:
Sd.les p er l^ in ployee
S a l t :
N i i m l x r >)J И т р 1о!/((.ч
S a le s (Uipi. I. a / И a 1.1 о /. (Aapd.al p er I'rtuployee
_ S (lIcs
( ! api t al
( '■ (I pi l ad
N ami x I- n f H n i p l u i p a s
l''igur(í 2.1: Dí'composilioii of va.liK' aiUh'd |)('г ('m|)loy(4í гаГк/’
prodiiriivil.y. II is (I(m-¡v('(1 as:
V a lu e A d d ed p er IC m ployee V (du e A dded
/V u m b er o f I^Jmitloyees
1Г VVC lia.v(^ ili(í dala, oi) mandioiirs vvoi’kí'd, il vvonid \)c. bcUcM* l o u s e
mai) lioiirs vvorkí'd iii IIk' d(Mi()miiialoi· iiisU'a.d of iiiimix'r or('m|)l()3/(4's. koi· a l)(d l(M· uiid(M*slaiidiiig o f llu' faclors wliicli a,Herí lilis i'a.lio, we rail d ( x : o m | ) o s c il iiilo ils compoiKuils wliirli аг(^ sliovvii in k^igiirc' 2 1and l^'iguix^ 2-2 iii l w o a.ll(M4ialiv(í vva.ys.
( , ' a . | ) i l a . l r a . i i \)c. ( í i l l u ' r l a . i i g i b k ' l i x ( ' d a . s s ( ' l s o r ( ) | ) ( ' i a . l i i i g r a . | ) i l a . l . l i y d ( ' r o n i | ) o s i i i g r a l i o s i i i l o s ( ' r i ( ' s o l r a . l . i o s , I Ik' l a ' l a . l i o i i s l i i p s a , m o i i g r a l i o s
''Sonreí': VVa.iiiai ( h)(S7). |). 20
V alu ( A(l(l('(l ¡HI' lA irployrc
V a l u e A d d t d
N u i n h c r o f I'j i nj ) l o] i ( ( S
V a lue A(i(l(‘(l to ( ■apU.al x ( uipi.l.al l\ r Ivni/ployi’c
\di dur__' \dd(d Cafnlal
( Aijutal N a nih( r o J l·', m ploi/ccs
and va.lii(' addiul l.o rapil.al raiio can Im' fli'coniposi'd rni-|,li('i· as: Sa les per l^m.ployei
\ (l i ai Add i d ( ' i i pi l i i I
Sale's (Uipt.lal Uaiio x Value. Added l.o S a les
_Sa l( .·;
( Ai pt In I S a l e s
l''igiir(' 2.2: Dccomposil.ioii of valiK' added |)('r cinplo^a'o ra.l.io’^
IxMoinc cloa.r('i·. I'dr <'xa.iii|)l(\ in i.lu' fiisl .seric's ol ratios in l''igui(; 2-1, tli(' multi|)rK'atioii of vahu' addc'd-to-sa.l('s ratio and tin' sa.lo.s |)('r om|)loycc ratio gives tli(' vaJne a.dd('d per ('inploy('e. So a.ii iner('a..se in ('itli('r or botli of these ratios vvonid iner('a,s(' tlu' valiu' a.dd('d pc'r ('inploy('('. 'I'lie sa.les [)or ('inploye(', in tnrn, is d('t('rinin('d hy tlu' sa.l('s ea.pita.l ratio and tlie ea.[)ital per ('inployec; ratio. In l·'ignr(' 2-2, \v(' can apply tin' same interpretation to IIk' system of ratios. Now in what follows, the unit of mea,snrement of the ratios, tlu;ir int('rpreta.tion, and tin' siginliea.nee of high ra,tios are explained.
• 'The first ra.tio, value ad d ed p e e eiieplonee's nuit is its moii(\y value. This ratio can h(' intei preU'd as tin' a.monnt of vv('a.lth which is created hy the eompany relative' to its nnmher ol ('inploye'C's. The ra.tio reflects
'Soiircii; VVaiiiiii ( 1 i)H7). |).20
llio ci[ir.i(Mi(:y with whirl) labor forci' prodiirc's output. Tlu^ higher the ratio, tli(i more favoi-ahh^ avc th(' ('fleets of tlu' Fa-ctors such as labor ('ifieiciiiry, maiiagiuiK'ut ('liici(iiiry, la.bor ina,uag('in(Mit rcdatioiis, and work attitudes on th(^ w('alth-cr('a.l iug ability of tlu' rompaiiy.
• S a les p er em p lo y ee ra tio is aJso m(‘a,siii('d by unit oF moiK'y pev ('inploy('('. It shows th(' a.mouut of sah's p('r ('inploy('('. Hut it does not ii(M(\ssa.rily show tlu' true' ('Ihric'ucy or ('llectiv c'i k's s of th(' ('iit('rpris(\
This ratio may b(^ high just l)('ca.us(' oF high ma,t('iia.l cost. VVIkui the input ma.t(uiaJs cost is high, th(^ piic(‘ oF output will b(' high, ddiis will causes sal(\s figiiic' to b(' high, and this h'a.ds to a high sal(\s per ('!nploy('(^ 1‘a.tio. 'rii(' l('\’('l of ratio ma.y cha.iig(' in difh'ii'iil. iiidiistiT's oi* may cha.iig(^ by difleix'iit biisiiK'ss policic's. It is significantly iufliKMiced by maikc'.t situation. Hut in the' sairu' orga.iiizatioiis, th(^ high ratio I’eflects efficic'iicy and g()od n)ark('ting sti-at('gy.
• ddici third ra.tio is value a d d ed ca p ita l ratio. TIk' unit is piir(^ number. VV(i can put (ritlun· tangible' fixc'd ass('ts or o|)('i‘a,ting ca|)ital in the d(Miomina.toi*. IF w(' |)ut tangibh' lix('d assc'ts in tlx' demominator,
lUc 1'a.tio r(dl('cts the' d('gi’('(' by which taiigibh' fixc'd a.ss(dMS ha.ve Ixien utili/xxl. llow(iV(u·, w(' should notice' that this ra,tio ca.n \)o inllu(uic(xl by infla.tioii and ma.rk('t sitiialioii. Hy marke't sitiia.tion, w('. r('lei‘ to th(^ d('ma,nd a.nd supply structiiie' in th(' ma.ik('t. Morc'ove'.i’ it can
\h) afl’('ct('(l by diflerc'iit polici('s in assc't valua.tion a.nd wh('th(M· iixcxl
assets iiic owiK'd or h'ase'd. ( ¡('iK'ra.lly, the' higln'r Ih c l a.tio, th(^ bed,ter ta.ngibh' fix(Ml a.ss('ts a,r(' iitili/e'd.
IF vv(' put o|)('rating ca.pil.al in tli(' diuiorninator, vvc will find a I'atio vvhidi shows how intcuisivcdy capital is us('d. In otlun' words it reflects i, th(^ d('gre(^ oF iix(ul assc't ntiliza.tion, //. tlu' control oF stock level cuid d(d)tors, iii. the' ('..(lici('ncy ol cash niana.gi'iiKMit. It is also afFectcxl by tlu'sanu'('xtcnaial Fa.c<,ors which adc'ct valium addcid-capital ratio wIkmi ca|)ital is oidy tangibh' (ix('d a.ss('(s. Tlu' high ratio means a.ss(d,s a.i(' ns('d satisla.ctorily, stocks a.nd (h'btors a.i'(' vvc'll controll(X.l and cash is w('II maiia.^i
• Tlie mxxt ra,tio is valúe addíd-lo-sales rali.o. 'TIh^ nnit is p(M*ceiitage. This ratio nsnally is stabhí Foi· a |)aiticnla.r (nit('.rpris(í, showing tlie l)nsiii(\ss policy a.nd th(' typc'oF industrial a.ctivity. llowcwí'r, th(' i*atio ma.y ílnctna.t(' diK' t.o clia.ng('s in sl.ock Iííví'Is. Otlun* t.hings Ixring e(]nal, an incrc^asc^ in this i’atio wonid imply an inci(xis('. in rcíwai’ds For manpowíM’ and/or ca.pita.l. This ratio ca.n Ix' a.l. most 100 pcírcent. lii this cas(í no bonght-in ma,t('ria.ls or s('ivic('s a.i(^ ns('d which is ini|X)ssibl(dor a company. A high ratio lídh'cts a. good policy, (díiciency in th(^ ns(í oF pnrchas(\s, a.nd good contiol oF stocks. A bnsiness which has a low va.Ine addí'd to sah's ratio is moi(' vnlix'rabh' to external Factors. A sinall changíí in tlu' pric(' oF |)iii’cha.s(\s ma.y highiy aíFect ihc total cost, Ixícansí^ th^' compa.ny is d('p(Mid(nil, on pni'chases.
• Salcs-capüal valió is shown by pnr(' nnmixn·. Aga.in in íhc placea oF capital wc ca.n pnt (^ith('r ta.ngibl(í íix('d a.ss('ts or op('ra.ting ca.|)ital. This i*atio shows how w(dl tlx' ca.|)ita.l is ntilizcMl, and l\\c (dlectiv(ni(íss oF markíd.ing. 'This la.tio can a.lso Ix' iidlii('iic('d by ('xtcnaia.l Factors nuMitioiuxl a.boví' in tlx' valiu' a.ddc'd to ca.pita.l latio ca.s(\ High i*ati.o
/ > a hot' (.' (;.s /, (.! on ipc I. i U o n ic s s
V al u c Added L a b o r ( ' o s l
V(line Added per Ivniployee \ Labor ( L)sl. per ILniployee
Vj i l i i C Added N l unbi r o f I ' L i i idifi/i f ,s
L a bur (-osl. N a i ni x r o f h L a f)loi/ees
2A : Di'coinposil ioi) of labor cosl. comix'l-il.ivcmk'ss ratio'^
rcflccls (íÍÍíc’k'iií capilal iililiza.iioii aiid/oi· good marketing.
• 'Flic la.st ratio in this s(x:tioii is eapi.l<i,l pt r em p loy ee raiio. VV(i can use tangihh' iix(ul a,ss(d<s or o|)(u*ating capita,I as capital in the num(u*ator. 'Flu' iniil is unit of inoiK'v p('r ('inploy('(\ 'Filis la.tio indica.ti's vvh('th(U‘ th(i company is ca.|)ita,l int(Misiv(' or labor inl.cmsiv(\ 'FIkí 1(ív('I of this ra.tio ca.ii change' b('tvv('('ii ('i)t('i’pris('s with diilei'e'iit p()lici(^s. 'Fhe high('r th(i i‘a,tio, tlu' inoie' ca.pita.l iiite'iisiV(' tlx' compa.ny is.^
2.3.2
Labor cost competitiveness ratios
lydhor cosl, eoitvpeM iivetiess r a iio is nu'asure'd by Uk' valium added divided
by th(' la.bor cosl.. It iiidica.te's the' va.liK' a(ld(‘d tha.t is g('ii('ra.t('(l by th(' ('iil('rpris(i for ('ach unit of moiK'y pa.id to the' ('inploye'i's. 'FIk^ le'la.tioiiship b('tw(XMi laboi* cost coniiK'titiv c'i k's s ratio, tlu' va.liu' a.dde'd pe'i· ('mployc'e^ and
th(' la.bor cost |)('r ('inploy('(' is shown in h^igiirc^ 2 2.
I^djor cost comixd/itiveuK'ss ra.tio is obl.aiiK'd l)y dividing valiKi added VVainai (19(S7). pp. ^U)
”S()mT(s VVaiiia.i ( li)87). p. 21
|)('i· (íinploycM' ra.i¡() by lal)oi· cosí, prv ('inployí'í' ra.l-io. lahoi· cosí, (•oin|)(^(,il,iví'iK'ss ca.ii Ix' ('iisiirc'd al I.Ik' l.inu' vvIk'ii a.ii iiirr('a.s(' iii ilu^ labor
cost. \)cv (nn|)loy('(' is log('Ui(M· vvil.li |)i(>|)orl,i()nal.(' 'wh'vch^c. iii tlu' valiuí added
\)VV ('iiiploycH'.
• 'rii(í iiiiit ol in('a.sm-('in('iil. of labor eos! prr nnjdoycv valió is nuil, oF nioiK'y. ddiis is l.lií' in('a.sni‘(' ol lolal \vag('s, sa.laiií's, boiiiis(\s, and ol,li(M' i('innii('.ialioiis |)('r ('iii|)loy('(\ 'l\\c liig|]('i‘ IIk' ratio, tluí higher r(d,nrns 1,0 iiidividna.l (nnployíH's.
• Labor cosí ronrprlÜirriK'ss raUo is shown by a. pni(' iininb('r. ( ¡(MKM'ally th(' cost coinpi'titiV('ii('ss of a. coiiipaiiy is ni(*a.sni('d by how innch cost it tak('s to g('iii'i‘at(' a pa.rticnla.i' ainoniit of inconu'. 'riun'e ai(i two indicatoi’s of cost coinp(d,itiV ( 'i k\s s. Oik' is tlu' aiuonnt o( cost incurred to carry out an a.ctivity a.iid tlu' otln'i' is how ('iiici('i)t and (dF(x:tive i\\c activity is carri('d out givcni a c('itaiii cost. This ratio shows the
cornp(d,itiv(ni('ss i)F an ('iit('r|)i'is(' in t(n ins oF its labor cost. The' highei· ratio MUians tlu^ company is comped,itiv(' in ten ins oF its labor cost. This (“a-ii \)c diKi to low wage' late's oi· diK' to (diicicnicy and (dF(x:tiv(m k\s s with
i(ia,sonables wag(i rate's.
2,3.3
Profitability ratios
Idle' ratie)s which have^ l)e'e'ii eliseuisse'el until iienv a,ie^ e-.e)iie:e'niexJ with the ine'asnre'ine'nt e)F pre)elned,ivity aiiel la.l)e)r e e)st e e)inpe'titive'.iie'ss e)F a business ('iite'ipi-ises Ibit the^ e)the'r me)st ce)inme)nly nse'd me'asnre' e>F a. e'e)inpa.ny’s
P r o f íl.(i.biíil y
о ¡K r a t i i iji I *гч f i t ( ) pr.i’d tni.if ( 'a p t i a l
P r o jiL lo H ales x H ales lo O p tra U n y (JairU al
( ) p< r a t i II ;i I ' r o f i t S a l ·
S a l r ^ ;
( ) pt r a l i i i t j ( t(i pi t al
OF· ;vll.('i'ii;il.iV('ly wr <‘,‘ui ;is:
P r o ] tlahth.I.y
( ) ¡H r a t i H f j I S ' i i f i t () p r r a l III !l ( -a p t t a l
V a lu e A d d ed l.o O p eral.iiifi C a p i.ia l X P r o fil, lo V a lu e A d d ed
Altılı it
( ) pi III 11II If ( ’ll p i t a l
( ) pi r a t i III/ I ^ru f i t \' , i hi i A i h t i i P '
2/1: Dccoinposilion ol p r o f i l , l a l i o “
pi'rlbrniaiKXî is ils proJU ahilily. Profila,hilily is usually aiialyz(xl by nsing Ihc la.lio of profil lo capilal. Iliis iiidica.l('s IIk' r('liirii lo llu' (:a|)ilal iiivcislcd in lli(' busiiKîss a,iid/or liovv \v(dl llu' capila.l is iis('d in llu^ biisiiuîss. Profilabilily i aii \)c shown as:
Р ’1‘()[г1.(1.1)Ийу O p e r a liiiy P r o fil.
O p e r a lin y C a p ila l
II also can be (^xpresscxl by nsing ollu'r indicalors of proiil or capilal. 1ч)г proiil \Vi) can iiairui proiil nlXrv inl(n(\sl payiiK'nl, or pi*oiil afUn' lax pa.viiKMil. And oIIk^i' indicaiois of ca.pila.1 can Ix' sliai4'liold(irs’ (X|uily, sliar('liold('.r’s (xpiily pins long l(Min lia.bilili('s, (^Ic. 'Г1к' pi'olilabilily ralios can !)(' d(x-.ompos('d a.s il is pr('S('nl('d in l·'igııı·(' 2 1.
'Sources Waiiiai ( 1987). |>. 28
By using lilis (l(xx)in|)()sili()ii, vv(î can s('(' l.lial prolilabilily is (lolcrmincd not only by Ih c i)ro|)orlion of value' addexl llial goe^s lo llic corn|)any and lo llioscî who |)i*ovid(^ capital in llu' form of piolil, but also by how well capital is us(xl to g('iıorat(î this valium a.dde'd. iiK'a.ns higlu'r vaJm^ addcxl with Ui(' giv(U) ca.pita.l is a. way ol ha-ving higİK'r pi'olita.bility, sinccî |)i’oiits arc a pa.i t ol l,h(' va.IiK^ a.ddexl.
• Pr()JUMÁ)üily rnlio is shown by |)('ic.('iitag('. 'This latio is tlui most commonly use'd ra.tio ı·('(l('cting the' pioiita.bility. It giv(\s an overall indication of how profitably a. company is using its capital r(ise)urccs. It also redlccts tlui ('a.rning powe'r of an ('iite'i pi isc^ Idi· l.lu^ providers of capital. 'rii(' high p('iT('iita.g(' iiK'ans that iiiv('stiii('iits in tİKM'iıten-prisiî llave g('n(M-at(xl favorable' redaii iis. 'This rate' slie)uld be^ at lexist higher than the' rate' that e:an be' e'a,rne'el fre)!!! ile'pe)siting me)iie'y into the ba.nks. The'reddre', the' highe'r the' ra.tie), the' be'tte'r le)i· the' e'iiten’|)rise.
• T he e)the'r ratie) is the' pivJU -salcs ral.io. 1Te' unit is a.gain pere:enita,ge. This ra.tie) she)ws what pre)pe)rtie)ii e)f sa.Ie's is led't te> the'. eniteM'|)rise afte'.r sul)trae:ting all e)the'i· e:e)sts. 'I'lıe'ie'lorei, it re'(lex:ts thei reîlatie)nship be'.twex'ii the^ te)tal |)re)elue‘tie)ii ee)sts ine urre'el a.nel the' sale'.s ine:ome exiriK'.el. 'This ratie) she)iilel be' as high as |)e)ssible^ se> that the.' eniterprise^ gets me)re ix'turns (re)m a give'ii a.me)nnt o\ sa.le^s.
• TİKÎ la.st ratie) is projil-lo-vald.r a d d n l ral.io. 11ie' unit is again pe'i*ce'iita.ge'. This I'a.tie) is a. pe'rle)inia.nee' indie a.te)!’ tha.t me'asiire's the' e)pe'i-a.t,ing pie)fit whie h is a.lle)e a.te'd te> the' |>ie)viele'is e)f e apita.l (re)m the) value' a.dde'el. 'Tliei high I’atie) exui be' due' te) a. high sa.le\s le'veMiue^ and/e)r
low costs. In both ease tli(^ liiglu'r latio is a favorabki situation for the company.*'^
''\S(4' Waiiiai (19(S7). pp. A A
C hapter 3
Application of The M ethod
3.1
An overview of Turkish fertilizer indus
try
Turkey has a. |)()|)iilalioii of (iO inillioii vvilJi a |)()|)iilalioii growth rate of about 2.5 |)('rc('ut. In this country agricultural s('ctor has au iin|)ortaut
vo\c of produciiJg high qiiaJity alinuiiitary products to lec'.d this po|)ulation.
Т1к'1Ч'Гог(^ ill ord(M· to iucrc'asc' tlx' productivity of agricultural industry, ((M tiliz(u\s а.г(' vita.Ily importa.iit.
lu.'rtiliziu· is an im|)ortaut input in agricultural |)roducts. That is wliy th(' (ertiliziu* industry has \)ccu oiu' cd' th(' iudustri(^s to which government has paid s|)(u-.ial att('ntion a.nd has a.llocatc'd iuciuitiV(^s. Thc'rtdore, in spite of short history of (ertilizi'.r industry in durki'y, it ha.s Ixm'ii highly d(iV(dop(id, and a.(lvaiic('d t(4:hnologi(\s ha.v(' Ihm'u importi'd Гог us(' in this industry,
herl.ilizi'!· |)roducl.i()ii is Ix'ing doin' by public, priva.t(', a.iid S('ini public ciit('rpris('s. Т1|('Г(' а,г(' s('V('ii compa,ni('s and 25 iiisl.itiitioiis (bra.nch(\s of
olhor companies) in I,his industry. In y\ppen(lix B, all corporations in this industry with tln'ir production capacity and output for tlu' y('ars 1988 I99I a.i'o provided, d'lie source; ol tli(;s(; data, is tin; a.ctivity i(;ports of d'urkish l''('rtili'/er (a)iporation ('riKiSAij) for l.liis pc'iiod.
3.1.1
Turkish Fortilizer Corporation (T U G S A §)
T'nikish l''(;rtiliz('r (Corporation ('I'lKISAi^), is a publicly ludd enterprise in this industry. Almost all of its capital stocks belong to the trexisury, and its other sliaredioldeu's a.i(' I'itibank, Siimerbank, M.K.I'bK., 'riirkiyc' ijeker l''a.brika.lari A. ij, and 'I'nikiye' '/ira.i Donatını Knrnmn, which all tog(;ther own only U.2() p(;rc('iit ol ca.pil,a.| stock.
'I'urkish fertilizer corporation consists of the; following five partner corporations, 'nJCJSAf? M(;rkez (Ankara,), Islazig l'ertiriz(;r (Corporation, ( hmilik Fertilizer Corporation, Kütahya l·(;rtiΓızer (Jorporation, and Samsun l·'ertil¡zer (jor|)oration.lt has about 80 penexMit of total fertilizer production in 'I'urkey, the; biggest fertilizer producing company in the country.
In 1991, 'I'UCSAS ha.d a rcf/isicrcd c a p it a lo i 850 Billion, but p a id in
c a p ila l was about TL. 280 Billion. The; (uiterprise was confronted with high
3.2 Applying the Wainai method
11('!C the iiH^lliod ('xplaiiK'd in liu' pix'vioiis ( liapti'r is us('d to (ind out value a.ddi'.d lor T(l(jSy\,^ lor l \\c y('a,is 1988 1991. 'Г1и' addition mciiliod is used l)('caus(' it is inoi'ii appropi’iaU' in compa-rison with subtraction method, ainl it is mor(^ compatibl·' to dnrkisli accounting systiun. VV(' know that th(' rcisults r('ina.in tli(' sanu'. (or both iiu'tliods. VVhih^ 1-i‘yhig to ada|)t the subtraction method, it was obs(M V('d that du(' to the' lack of enough data a i('liaJ)l('. rc'.sult lor pni'cliasi'd mati'i ial costs, a.nd Ik'iicc' l.lic^ valium addcxl, could not be obtained. In tlu' company’s lina.ncial statcmunits, the invcnitories of work-in-))roc(iss and linisluid goods a.i‘(^ not r('|)r(is(uit(xl as two sc^parate iti'ins. Т1к'Г('1()Г(', th(' piopoi tion of ii)V('iitory conta.iiK'd in l,h(^ vaJiKi a.dd(xl could not b(' clc'arly (1(?Пп(м1. Thus, in (,his study th(' addition nudJiod was s('l(x:t(id.
y\fter linding i \\c valiK' add('d, th(' piodiictivity and other related ratios a,14' calculat(xl. Th('S(' ratios In^lp us to ('vaJua.t('. tlu' рс'гГоппапсс^ of th(i ('iit('.rprise oven* this specific pc'riod.
3.2-1
D ata collection and transform ation
do calculate value', added, tlie^ iinancia.l stati'nu'uts for the years 1987-1991 W(U4^ iKiechxl. 'Г1к' activity i(i|)orts of l\\c com|)a-iiy were colhictexl from th(^ ge'jieral dircictory of TIJ(!SA,^ in У\пка.га. d'lu^ I’c^ports contain income sta.te'imnit, a.nd bahuice^ sh('('t foi· the' y('a.rs. 'Г1к' linancial stati'uu'nts are', t.liosi' that a.i4^ le^portc'd to tlici dV('a,sniy a.nd Ministry of hdiiancci ('Wi'.ry
уч'.аг. I ’Ik^sc liiiaiicial stalcnu'.iils аг(' rc'prodiKXM.l in Appendix C. The cost allocation tables are ga.tliered from tlu^ Siiprcnnci /\uditing Hoard in Ankara. In /\ppendix (.), tlu' cost allocation tabk's (oi* ddidSAi^ (centen*) are also
p l ( \ S ( ' l l t ( x l .
In oi’di'i’ to compa.i‘(' I.Ik' i(\snlts lor (1k‘ ya'ars vv(' slionid translonn tli(' amounts to a, lix('d piic(\ 'Г1к‘ уччп· li)SS is cIu)S(Mi to Ix' tlx^ ba,s(^ y(^ir. 11имч'Гог(.' tl)(' a.monnts a,i4' сотра,га.Ы(' id И)88 piic('s. In value added ca.lcidation, using a.ddition imdJiod, \v(' should add (.og(d,li(n· i)roiit, labor cost, intinx^st (iX|)(uis(', ta,x('s, and d('pi('cia.tion. So, for (^acli of them tlui appropriate index has to h e uscul. In this study, (jross n a tio n a l produ ct (CiNM^ deflator) is nsc'd for piofit/loss and int(M4\st (xxp('iis(' of tlui company. /\lt('r (inding t h ('( iNH (h'laJl.ors loi-tlu'ix'i iod l!)88 lOiJl Irom th(i sta.tistical yciai book of d'urkcyy, ( !NH co(diici(^nts алч^ obtaiiuxl using tlie simple foriiiula:
/ 1 М 1) /· /· ' · / ( ^ ^ l \ ■ u . r r r n l . Y e n
( , N r ( ' O c J J i C i r i l t c u r r r n l . Y r a r “ " T
( ! N P n n . r . Y e a r (1988)
rh('ii proiit/loss, алк1 intc'rc'st ('xp(uis(' of 'rUCbSAij is dividcxl to these (4X'(fici(mts for ('a.ch y(xir.
1() (4)i)V('rt th(i la.bor (ost aлnounts to l!)88 lixixl |)i*i(4\s, at first it was d(4.:id(ul to us(i tlu^ living ('.xpcmsc^ indi(4's of ('ax'h алчла in which TUCJSAfj lias facl.orii's (Апкалчц Khizig^ (¡('inlik, Kiita.hya., Saлnsun). Hut th(\S(i da.ta w(U4i not a.va.ilabhx Т1имч'1ог(^ tlx' ron san u r p ri(‘r i.n din s (OIM) of th(iS(' citi(\s are iisi'd. ll(U4' aJso th(' (dM’s for th(' citi(\s Kla.'/ig and KiitaJiya. w('i('. not found. It is th(' ri'ason tha-t (MM’s of tlx'ii· ix'ighboiing citi('s, Diyarbakir instciad of Klazig, алк1 Kskislxdiir instixi.d of Kiita.hya. \ycvc. us('d. Aft('i· (4)ll(4‘.ting
Ü I C S C Î d a t a , t h e . C P \ c o i d i i c i c î i ı t s Г о г r a . c h c i t y a r c c a l c u l a t e d u s i n g t h e a b o v e f o n n u l a , v v İ K ' T i ' C İ M i i i d i c ( ' s а г ( ^ | ) i i t i n t i n ' | ) l a c ( ' o f ( ^ N P ( h d l a t o r s . T h e n , t l i ( i a v e r a g e s o l t l u i s c i c o ( d f i c i ( U ) ! s i s u s c ' d t o c o n v i ' i t l a l ) o r c o s t s t o b a s e y e a r p r i c e ' s . ' Г 1 и ' o t İ K ' r i t ( ' i n ( . h a t s h o u l d I x ' c o n \ ( ' i t ( ‘ d t o I ! ) « S ( S p i ' i c x ' s i s t l u i d ( ' p i 4 ' c i a t i o n ( ^ x p c ' i i s e ' i t c ' i n . I n t h i s i t e ' i i i a d i i l e . i e ' i i t p r o c e ' . d u r e î i s u s e d . A t f i r s t t h i s i t ( ' i n , Г о | · ( ' a c h y e ' a r , s h o u l d I x ' c o n v i ' i t c ' d t o c u r i - e n t p r i c e s a n d t h e n t o \.\\o l 9 c S ( S | ) r i c ( ^ s . T I k^ d ( ' | ) r ( ' c i a X i o n ( ' x p e ' i i s e ^ w h i c h a p p e ^ a r e ^ s i n l\ \ c f i n a n c i a l s t a t e n i K ' i i t s o f t h e ' c o m p a n y i s t h ( ^ a m o u n t w h i c h o n c e w a s c a l c u l a t e d w l x m t h e a s s e ' t s w e ' r c ' | ) u i - c l i a . s ( ' d . S o i n f l a . t i o n r a t ( \ s o v e n * t h e y e a r s h a . v ( ' n o t Ik h'i i c o n s i d e ' r e ' e l i n t h e ' d ( ' p i 4 ' c i a . t i o n ( ' x p c ' i i s e ' w r i t t e ' i i i n t l u ^ f i n a n c i a l s t a t e m u ' i i t s . I l o w c ' v e ' r , p u b l i c l y I x ^ l d ( ' n t ( ' i p i i s ( ' s i n T u r k c i y i x w a l u a t c ' . t h e i r a s s e t s a c c o r d i n g t o t l u ^ c o e ' d f i c i e m t s w h i c h a . i ( ' p r e x . h . ' t e ' r m i i u x l b y M i n i s t r y o f h ' i n a n c i i e v e r y y c ' a . i · . T h u s T U ( ! S A i ^ , a . | ) u b l i c l y o w i x ' d c o m | ) a n y , r e e v a l u a t e s i t s a s s e t s b a . s e d o n t l u e s e e c o e f l i c i c ' i i t s . A f t e ' r l e e v a l u a t i n g t l i e a s s e t s , t h e l u e w i x e v a l u a t i ' d d e e p r e e c i a t i o n e x p e e n s e ' i s d ( ' t ( ' i i n i i K ' d ( e v e r y y c e a r a n d ( e n t e i x e d i n t o t h e d e p i c e c i a t i o n t a l ) l ( e s . ‘ 1 ч ) г t h i s s t u d y , t l x e s e e r e v a l u a t c e d d ( e [ ) r e c i a t i o n ( e x | ) ( e n s e s а л ч е u s c e d . T h e d a t a i s c o l h e c t e e d f r o m t h e e S u p r e m e A u i d i t i n g B o a r d ’ s i x e p o r t s a b o u t T U C S A . ^ . K n o w i n g t h c e s c e r c e v a l u a J x e d d ( e | ) r ( e c i a t i o u ( ' x p e e n s c e s f o r t l u e p ( ' r i o d 1 9 8 8 1 9 9 1 , t l x e y c a n I x ' c o n v c e r t c e d t o 1 9 8 8 f i x e d p r i c x e s . T o l . l i i s ( e n d , t h ( ' w h o l e s a l e p r i c e i n d i c e s ( V Y P I ) o f t l x e c l u e m i c a l s a . n d p ( e t i 4 ) l ( e u m p i 4 ) d u c t s i n d u s t r y f o r p u b l i c s ( ' c i , o r a . i x ' u s ( ' d . d ' l u e p r o c e e d u r c e F o i ' o b t a i n i n g t l u e W P l c o e f f i c i e e n t s i s s a n u ' a s ( ¡ N P a n d ( M M c o e f f i c i e n t s . I h ' s i i h e s ( h e p i x e c i a t i o n , t h ( ' S ( ' c o ( ‘ f l i c i ( ' n t s a . i ( ' i i s ( ' d t o ( 4 ) i i v ( ' r t t l x e t a x ( e x [ ) ( e n s ( e s
'S('(' A t a m a n (19î)2). |)|). 1 2 0 liJiJ lor тог(' (l('ta.ils.
and stock amounts to the 1988 prices. All indices and obtained coeiricients vvliicli are iisc'd in this tlu'sis ar(' pi'o\dd('d in the' Tabh' 8.1.
3*2.2
Value added calculation
As iiKMitioiK'd u.l)()V(', (,Ik' a.ddition iiH'thod is iis('d to ca.h nla.t(^ va.lu(' a,dd(H.I. hVoin ihi) pri'vioiis chapt('r vv(' know that
ValiKi Addi^l =: Pi’ofit -f Labor Cost -f lnt('r(.'st l^xpcmsci + Tax('s -|- l)('pi‘('(:ia.tion
T h (‘ va.liK' a.ddi'd ca-h iilations (oi· th(' y(‘a.rs l!)(S(S l!)!)l a.I, ciiiii'iit |)iic('s a,i(^ pr(is(uit(xl in dabhis A.I A.d in the' Ap|)(uidix A.
TİK'. net projil^ th('. iK't incoiiK^ aftei- tax and int(M(\st pa.ynKMits, is taken IVoin the income statcniKMit. However, w(' should show the profit which conu's out through th(' a.ctivity of th(' ('iit('rpris('. (lining th(^ y(^ar. Th(u*(dbre, W(î subtract all (ixtra.ordinary and nonop('ra,ting ı■(W(мıu(^s and profits from th(' ii(',t |)rofit, a,nd add ba,ck a.II (\xtra.oi(lina.i‘y a.nd nonop(u-ating (^xpcuiscís a.nd losscis to thci above'. vaJiu'. 'TİK'se' itcmis a,i(' also providcxl in th e income st,a,t('ment.
¡Albor cost contains all salari(\s, wage's, bonuse's, and otiier remunera
tions giveui to the^ worke'.rs, pe'.rsonned, a.nd direictors. 'TİKîseî amounts are take'll from the^ cost allocation ta.ble' of the' company.
liiiriTsLs on b orro m iu j a.re' ta.keui dire'ctly IVoin incomes statemu'iit. It is
the' inteux'st e'Xpe'iise' during the' consiele're'd ye'a.r.
Index and Coefficients Used in This Study
Item 1988 1989 1990 1991
'IP-Deflator 1 3 4, 0 6 0 , 0 8 4 .9 2 3 5 , 3 0 5 , 4 7 8 . 3 3 9 9 , 8 3 9 , 8 1 4 . 6 630,7 8 5 , 3 1 1 .6
(Mil. TL.) (Mil. TL.) (Mil. TL.) (Mil. TL.)
Coefficients _ (1988 = 100) 1.000 1.755 2.983 4.705 lole Sales P r i c e idex: Chemicals, itroleum p r o d u c t s (1987 = 100) 184.8 304.2 501.9 766.5
#ole Sales Price rOeflicients _ (1988 = 100) 1.000 1.646 2.716 4.148 I (Ankara) ;I (Bursa) i (Diyabakir) Si (Eskishehir) I (Samsun) 171.1 168.8 173.8 169.1 179.7 281.1 279.3 298.1 289.2 293.7 455.9 451.3 471.0 471.8 461.2 769.0 737.1 778.6 783.3 755.9 I Coeff i ci e nt s: kara (1988 =100) i s a (1988 = 100) Y a r b a k i r , . (1988 = 100) k i s h e h i r i (1988 = 100) msun(198 8 = 100) 1.000 1.000 1.000 1.000 1.000 1.643 1.655 1.715 1.710 1.634 2.665 2.674 2.710 2.790 2.566 4.494 4.367 4.480 4.632 4.206 cage 1.000 1.671 2.681 4.436 T a b l e 3.1
'I'lic ncx(, it,cm is the <lcpr(xi(dioii. o f a s sc is during I,lie year. 'I'liis figure is [irovided in cost allocation table. It is the ainonnt ol depixHnation expense (hiring the yea.r. In fact, this anionnt is not in current pric(;s, it is directly tak('ii froin the financial stat<'iiients and is bas('d on historical values.
d'lieix' a.re thix'e kinds ol l,a.X('s. 'I'Ik' first oik' is sa les l.ax ov vaJiie a.dded lax. 'I his it('iii is in the incoiiK'statc'iiK'iit and is subtracted froiii gross sedes. 'I’lu' second item is lax, slain]), an d f n s which arc' small amounts that go to ( he governiTuuit during the yc'ar. 'I'liis item is provided in the cost allocation table. 'The last item is in co m e lax. Notice' that in !!)!)() and 1991, bcicause of operating loss, there is no reported income tax. 'The income tax is given in the income' state'iiie'iit.
'I’lie last itemi adju slm en l.s f o r eo sl o f sa le s in the tables, neexis a little bit more explanation. In cost axconiiting procc'diire's, in order to find the incurred cost (hiring the yc'ar, acconiitants snbtra,ct beginning inventory and a.dd ending inventory of finished goods and work in process. 'I'liis is done beca.nse they want to find the cost of production during that pa.rticiilar y('a.r. llovve'ver in orde'r l.o calcnlale' value; aeldexl, we shonid find the proportion of value; added in the sale's amount, not in the output. So we; add back b(;ginning inventory and subtract (;iiding inventory. Here we shonid consider only the; proiiortion which is conta,iii(;d in the value adde;d For tha.t particular ye'ar. 'I'liiis the' proportion which contains only i. labor cost, it. depr(;cia.tion, ii.i. tax, stamp, and fe'c's is ns(;d in the stock items. rii(' |)roportioiis a.re' give'll in l.he' pa.ra.iithe'S('s. 'Г1к' be'ginning and e;iiding iiive'iitory amonnts are; takeiii From balance. sh('e;ts oF the; two cons(;cntive ye'ars. Mc'lili Ha.iç (1991) shows this adjnstme'iit proce'ss (lif[er(;ntly. lie
siil)l,ra,cl,s b('gimiing iiivcnl.ory and iuld.s l)a.c.l< Uu; (hiding irivcnlory in tlic valiK' a.dd(',d ca.lcnla.l.ion. 1 Iovvc'vcm·, if vv(' vva.nl. I,о consich'r l.lu' d('iinil.ion of
llic value added as I,lie diil’erence bel.vvi'en .selling oalpuL and buying input, l.lie pi'oper vva.y is to add back biginning invi'iitory and subtract ending inventory a.s ('X|)la.iii('d above'.^
By using tlu' coellicients vvliicli we have louiid in the previous .section, th(! value addl'd a.t 1988 pi'ici^s can be < a.lcula.t<,'d. 'I’his calculation and thi; results a,re giv'cii in the 'labliis Л.-9 Л.8 in thi' Appendix Л. I'or example to calculate the Inti'iest on Boriovvings foi- the year 1991, its value at current price (Г)84,997,3()Г),801.9.h T b .) is dividixl by the (¡N B c.oeliicients for this yi'ar (-i.70.3), and tlii' value addl'd a.t 1988 prices ( 12'l,:{.3.3,2/10,:И().38 'I'L.) is obtained. 'The other items are ca.li:ula,ted in similar way for each year.
3.2.3
Finding the ratios
/\rter c.alcula,tion of yearly \'a.lue aililed, it is possible to obtain the ratios explained in the previous chapter. 'I'liey are calculated using the rormulae which were shown in tha,t cJiapter. The latios are given in the d’ables A .9 -A. 12 in the Appendix -A.
At the bottom of the tables, there are other nseful indii:a.tors which can be helpful in interpreting the ra.tios. 'The sales (igiire is taken from income sta,tement. It is the net sa,les during the particular year. ()pera.ting |)roiit is calculated a.s follows:
ASci' Ha;, (1991).
Operating Profit = Value /Vdded Iad)or (!ost Depreciation
Number of (unployee.s is tlie a.v('ia.ge nunilx'r of ('inployees between the two consecutive years. 'l'Iuîse uumbeus ai(' takcui from activity re|)orts of r U ( D u r i n g ('vc'ry y('a,r tlx'ici ar<' tcunpoiary workrus. 'I'lieir number is also incliidi'd in tins item, sincx' lli('y aix' paid during tlie y(uu' a.nd tli<\y lia.v(' coid.ribut(!d in the vaJiU! a,dd(xl g('ii('ra.ting proc(;ss. No over time work is assumed li(;r(;, since tlic; da.ta about it was not ava.ilabl(\
'tangible fixed assi'ts and curixMit ass<d.s itc'ins a.re the average numbers betwi'en th(i two cons<'cutiv(yy('a.rs. Tlu'sci figure's are; providexf in the; balance slux't of tlui ent('rpris('.
'The Sah's, Asse'ts, Raw Mateuilas and Oornponents (Jost figures are conveu’ted to the; 1988 f)ase yexir |)ric(;s by using VVPI coefficients. A combined table consisted of value; adelexl, sa.le;s, and other usedul indicators
o v er the pe;rie)d, is pre;se'iitexl in the; Table; 3.2.
3.3 Empirical results
I'he; ratios for the ye;ars are; reprodue eel in table; 3.3. 'The; last column shows the; a.ve;rage;s of (;ach ratie). A e:e)mpa.rise)ii e>f the; a.ve;rage; e;an be; maele; with the' inelividual value; e)f the; ratios for e'aeJi ye'ar. It ean be se;e;n that tfio eeunpany ha.s its be'st pe;rlbrmane:e; iu 1989. 'Phis year the; e;nterprise was pre)elue:tive;, e;e)mpe'titive; in la.be)r ee)st, anel pre>fita.ble; re;lative to the other ye'ars. 'The' pe;re;e'iitage; ediange's e>l ra.tie)s fre)in ye-ar te> ye'a.r are |)re)viele;d in the' 'Fable 3.3.
V a lu e A d d e d a n d O t h e r U s e fu l In d ic a t o r s F o r th e P e r io d 1 9 8 8 - 1 9 9 1 ( 1 9 8 8 = 1 0 0 ) It e m 1 9 8 8 1 9 8 9 1 9 9 0 1 9 9 1 S a le s 1 9 2 .6 3 8 ,0 8 0 .2 0 3 .0 0 T L 2 4 9 .4 9 7 ,0 5 6 .2 9 2 .2 2 TL. 1 4 8 .2 5 7 5 0 7 .8 8 6 .2 3 TL. 2 1 1 ,9 3 2 ,3 3 6 .3 1 7 .0 2 TL . V a lu e A d d e d 1 3 5 .0 1 0 .7 8 2 .9 0 2 .3 2 T L 1 7 3 .7 2 6 .2 1 2 ,7 1 9 .0 9 TL . 1 1 6 .4 7 6 .4 6 3 .3 3 3 .9 8 T L . 1 1 8 ,7 3 4 .4 1 0 ,7 6 8 .9 1 TL . L a b o r C o s t 3 0 ,0 4 4 ,4 6 0 .0 0 0 .0 0 TL. 4 3 .1 5 5 .7 2 3 .5 1 8 .8 5 TL . 5 5 ,8 7 2 ,7 6 6 .5 0 5 .0 4 T L . 7 0 ,4 1 3 ,2 9 7 ,1 1 4 .5 2 TL . O p e r a t in g P r o fit 4 1 ,6 3 6 .7 8 5 .4 7 5 .3 6 TL. 6 0 .8 2 6 ,9 0 6 .8 5 1 .6 7 TL . 6 5 9 ,8 6 6 .3 2 3 .8 8 T L . 3 2 3 ,7 8 2 ,7 5 5 .5 6 TL . N u m b e r o f E m p lo y e e s 5 ,6 6 2 5 ,5 0 6 5 ,7 0 9 5 ,8 9 9 T a n g ib le R x e d A s s e t s 2 5 9 ,0 1 2 .3 8 7 ,4 4 8 .9 3 T L 2 5 5 .0 7 0 ,5 2 0 .9 4 0 .7 0 TL. 2 2 6 .6 0 2 ,8 5 8 ,0 5 4 .4 3 T L . 2 2 6 .7 6 2 .8 4 3 ,9 3 8 .5 5 TL. C u r r e n t A s s e t s 9 9 .4 5 6 ,6 2 0 .9 4 1 .2 1 TL. 9 5 ,0 8 3 .0 4 5 ,7 5 8 .7 5 TL . 8 7 ,6 8 6 ,8 2 1 ,3 7 8 .8 6 TL . 8 7 ,7 2 9 ,3 9 6 ,0 8 5 .8 9 TL . O p e r a t in g C a p it a l 3 5 8 .4 6 9 ,0 0 8 ,3 9 0 .1 4 TL. 3 5 0 ,1 5 3 ,5 6 6 ,6 9 9 .4 5 T L . 3 1 4 .2 8 9 ,6 7 9 ,4 3 3 .2 9 T L . 3 1 4 ,4 9 2 ,2 4 5 ,0 2 4 .4 5 TL. In t e r e s t E x p e n s e 6 0 .8 1 4 ,8 4 6 ,6 0 3 .2 0 TL . 5 0 ,4 8 4 ,0 3 8 .0 2 3 .3 7 T L . 5 2 ,0 0 7 .6 3 6 ,4 6 5 .3 9 T L . 1 2 4 .3 3 5 ,2 4 0 ,3 4 0 .4 8 TL. R a w M a t e r i a l s a n d C o m p o n e n t s C o s t 1 3 3 ,3 5 6 ,2 9 9 ,0 0 0 .0 0 T L 1 2 8 ,4 8 4 ,8 8 1 ,5 3 0 .9 8 T L . 9 5 ,5 7 6 ,7 2 3 ,4 9 0 .4 3 T L . 9 2 ,7 5 1 ,4 6 2 ,3 9 1 .5 1 TL . T able 3 .2
List of Ratios For the Period 1988 - 1991 with Their Average (1988 = 100)
Item 1988 1989 1990 1991 Average
Value Added Per Employee
Value Added / Number of Employees 23,845.069.39 TL. 31.552,163.59 TL. 20,402.253.17 TL. 20,127,887.91 TL. 23.981,843.51 TL
Sales Per Employee
Sales / Number Of Employees 34,022,974.25 TL. 45,313.668.05 TL. 25.969,085.28 TL. 35.926,824.26 TL. 35,081,137.96 TL
Value Added Per Capital
i. Value Added / Tangible Fixed Assets 0.52 0.68 0.51 0.52 0.56
ii. Value Added / Operating Capital 0.38 0.50 0.37 0.41 0.41
Value Added-to-Sales Ratio
Valur Added / Sales 70.00 % 70.00 % 79.00 % 56.00 % 69.00 %
Sales Per Capital
i. Sales / Tangible Fixed Assets 0.74 0.98 0.65 0.93 0.83
li. Sales / Operating Capital 0.54 0.71 0.47 0.60 0.60
Capital Per Employee
1. Tangible Rxed Assets / Number of Employees 45,745,741.34 TL 46,325,920.98 TL. 39,692,215.46 TL. 38.440,896.58 TL. 42,551,193.59 TL
I. Operating Capita / Number of Employees 63,311,375.55 TL. 63,594,908.59 TL. 55,051,616.65 TL. 53,312,806.41 TL. 58,817,676.80 TL
Labor Cost Per Employee
Labor Cost / Number of Employees 5,306,333.45 TL. 7,837,944.70 TL. 9,786,786.92 TL. 11,936.480.27 TL. 8,716,886.33 TL
Labor Cost Competitiveness
Value Added / Labor Cost 4.49 4.03 2.08 1.69 3.07
Profitability
Operating Profit / Operating Capital 12.00 % 17.00 % 0.00 % 0.00 % 7.00 %
Profit Per Sales
Operating Profit / Sales 22.00 % 24.00 % 0.00 % 0.00 % 12.00 %
Profit-to-Value Added
Operating Profit / Value Added 31.00 % 35.00 % 0.01 % 0.00 % 17.00 %
